4 Stocks Spiking on Big Volume - views

WINDERMERE, Fla. (Stockpickr) -- Professional traders running mutual funds and hedge funds don’t just look at a stock’s price moves; they also track big changes in volume activity. Often when above-average volume moves into an equity, it precedes a large spike in volatility.

Major moves in volume can signal unusual activity, such as insider buying or selling -- or buying or selling by “superinvestors.”

Unusual volume can also be a major signal that hedge funds and momentum traders are piling into a stock ahead of a catalyst. These types of traders like to get in well before a large spike, so it’s always a smart move to monitor unusual volume. That said, remember to combine trend and price action with unusual volume. Put them all together to help you decipher the next big trend for any stock.

Immersion (IMMR) develops, manufactures, licenses and supports a range of hardware and software technologies and products that enhance digital devices with touch interaction. This stock closed up 4.9% at $11.49 on Monday.

Monday's Volume: 566,000

Average Volume: 205,228

Volume % Change: 169%

From a technical perspective, IMMR trended higher here right above some near-term support around $10.50 with above-average volume. This stock has been uptrending strong for the last month, with shares soaring higher from its low of $5.90 to its recent high of $11.95. During that move, shares of IMMR have been mostly making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of IMMR within range of triggering a near-term breakout trade. That trade will hit if IMMR manages to clear some near-term overhead resistance at $11.95 with high volume.

Traders should now look for long-biased trades in IMMR as long as it’s trending above Monday’s low of $10.76 or above $10.50, and then once it sustains a move or close above $11.95 with volume that hits near or above 205,228. If that breakout hits soon, then IMMR will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $14 to $16.

CaesarStone Sdot-Yam

CaesarStone Sdot-Yam (CSTE) manufactures engineered quartz surfaces used in both residential and commercial buildings as countertops, vanities, wall cladding, floors and other interior surfaces. This stock closed up 2.7% to $25.40 on Monday.

Monday's Volume: 150,000

Average Volume: 62,490

Volume % Change: 110%

From a technical perspective, CSTE bounced higher here right above some near-term support at $24.18 with above-average volume. This stock has been uptrending strong for the last six months, with shares soaring higher from its low of $14.07 to its recent high of $25.75. During that move, shares of CSTE have been consistently making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of CSTE within range of triggering a near-term breakout trade. That trade will hit if CSTE manages to take out its all-time high at $25.75 with high volume.

Traders should now look for long-biased trades in CSTE as long as it’s trending above $24.18 to $23 and then once it sustains a move or close above $25.75 with volume that hits near or above 62,490 shares. If that breakout hits soon, then CSTE will set up to enter new all-time-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $30 to $32.

Lions Gate Entertainment

Lions Gate Entertainment (LGF) is an entertainment company with a presence in motion picture production and distribution, television programming and syndication, home entertainment, new channel platforms and international distribution and sales. This stock closed up 3.9% at $23.20 on Monday.

Monday's Volume: 2.70 million

Average Volume: 1.85 million

Volume % Change: 103%

From a technical perspective, LGF bounced higher here right above some near-term support at $22 with heavy upside volume. This stock has been uptrending strong for the last four months, with shares ripping higher from its low of $15.26 to its recent high of $23.45. During that move, shares of LGF have been consistently making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of LGF within range of triggering a near-term breakout trade. That trade will hit if LGF manages to take out its 52-week high of $23.45 with high volume.

Traders should now look for long-biased trades in LGF as long as it’s trending above $22 or $21.50 and then once it sustains a move or close above $23.45 with volume that hits near or above 1.85 million shares. If that breakout triggers soon, then LGF will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $25 to $27.

From a technical perspective, CLMS ripped higher here above some near-term support at $11.25, and the stock broke out above some near-term overhead resistance levels at $11.74 to $11.93 with above-average volume. This stock finished the trading session at $12.03, which was about 20 cents off its intraday high of $12.26.

Traders should now look for long-biased trades in CLMS as long as it’s trending above those breakout levels at $11.74 to $11.93, or above Monday’s low at $11.41 with strong upside volume flows. I would consider any upside volume day that registers near or above its three-month average action of 204,521 shares as bullish. If CLMS can maintain that trend, then this stock will set up to re-test or possibly take out its next major overhead resistance levels at $12.81 to $13.42. Any high-volume move above $13.42 will then put $13.74 to $14.40 into range for shares of CLMS.

At the time of publication, author had no positions in stocks mentioned.

Roberto Pedone, based out of Windermere, Fla., is an independent trader who focuses on technical analysis for small- and large-cap stocks, options, futures, commodities and currencies. Roberto studied international business at the Milwaukee School of Engineering, and he spent a year overseas studying business in Lubeck, Germany. His work has appeared on financial outlets including CNBC.com and Forbes.com. You can follow Pedone on Twitter at www.twitter.com/zerosum24 or @zerosum24.